There has been a recent uptick in the number of persons who are either self-employed or own their own enterprises. According to Statista, there were over 4.29 million independent contractors in the United States in July of 2022. Many people now have numerous concerns about the divorce process. In this post, we’ll go over six important things to keep in mind if you’re getting a divorce and also running a business.
Do not attempt to conceal wealth
The term “matrimonial assets” refers to any money or property acquired during the marriage. Real estate, retirement funds, and other investments are all examples of such assets. However, redistributing business assets might be tricky if one spouse is attempting to lessen the worth of the enterprise. If you try to get out of paying your spouse their fair share of the divorce settlement, the court will look at you with disdain. More money may be required from you.
Divorcing company owners should consider signing a prenuptial agreement
To some, the idea of getting a prenuptial agreement when they’re about to be married seems absurd. However, if you run your own company or are an entrepreneur, you should give this some serious thought. You have the ability to outline in detail the treatment of your business and its assets in the event of a divorce in your agreement. Prenuptial and postnuptial agreements are not legally obligatory, but courts are more willing to take them into account when determining monetary awards.
Segregate personal spending from corporate expenses
It is wise to maintain business funds apart from household funds to ensure the security of your business. For instance, determining whether or not your firm should be included in the marital pot becomes more complicated if you have previously used monies from the equity in the family home. Don’t pay for personal items with company money either; doing so will only add complexity and hurt your chances of getting a fair divorce settlement.
Keep your spouse out of the company
It’s possible that business problems will arise as a result of the spouse’s possible involvement in the enterprise. Divorce proceedings could be complicated if one spouse has a greater financial stake in the company because of the other’s role as a director appointed by the firm owner for tax efficiency reasons.
If you wish to protect your business in the event of a divorce, you should avoid incorporating your spouse as a director or secretary of the company.
Take generous pay from the company
It is standard practice to forego immediate monetary rewards (such as a larger salary) in order to fund the initial stages of a company venture.
However, let’s say you’re not drawing a sufficient salary from your business. If you utilized marital funds to start and grow your firm, your ex-spouse may argue that they are now entitled to a larger share of the company’s assets. If you pay yourself a fair wage, you can lessen the impact of a divorce on your finances.
If you are getting a divorce and have a business, hire a family lawyer who will work for a speedy settlement
If you are a business owner facing divorce, you should always seek the advice of a family lawyer. As you begin your sessions, it is important to establish realistic expectations for the duration of the process.
Although business assets might complicate a divorce, if you and your spouse are able to reach an agreement, the process can be very easy. Finally, you may also consider checking this website if your spouse is an active-duty member.